Originally published October 20, 2007 at 12:00 AM | Page modified October 20, 2007 at 2:01 AM
Clean technologies propel venture capital funding
Shrugging off credit-related economic woes, venture capitalists bet heavily on new companies in the third quarter, driven by opportunities...
Seattle Times business reporter
Shrugging off credit-related economic woes, venture capitalists bet heavily on new companies in the third quarter, driven by opportunities in clean technologies, software and biotechnology.
But Washington companies didn't attract as much cash as in the recent past, as new funding for local biotech plummeted. An Ernst & Young/VentureOne report ranked the state in eighth place by dollar amount received, down from third in the second quarter.
The VentureOne report said the venture-capital amount invested this quarter, at $8.07 billion, is the highest since the first quarter of 2001, during the tech bubble.
The competing PricewaterhouseCoopers/National Venture Capital Association MoneyTree report, based on Thomson Financial data, came up with a different number: $7.1 billion, slightly down from the second quarter, but still robust.
The "steady pace" of investment may result in "the highest level since the fourth quarter of 2001," said Matthew Toole, private-equity-research director for Thomson Financial, during a conference call with reporters.
Riding high amid environmental concerns and rising crude-oil prices, clean technologies raised a record $844 million, according to the MoneyTree report.
The sector is "reaching critical mass," said Bryan Stolle, general partner with Mohr Davidow Ventures, a VC fund that specializes in technology but is now delving into alternative energy. "The primary focus for us is diversification away from oil."
There's a certain amount of "frothiness" in clean-tech investment, resulting in high prices paid for opportunities in the sector, Stolle said, but it's nothing like last decade's Internet bubble. "All of these things, we believe, have real businesses and real economics behind them."
Biotechnology also enjoys a favorable investment climate, driven by big pharmaceuticals that need to replenish dry product pipelines.
"There's much more [mergers and acquisitions] activity than we've had in the previous 15 years," said Tracy Lefteroff, global managing partner of venture capital and life-sciences-industries services at PricewaterhouseCoopers.
In Washington state, the top deals went to medical-device company EndoGastric Solutions, which raised $29.6 million, and to Zillow, the Seattle online real-estate-services firm that raised $27.2 million, according to MoneyTree.
Wireless software developer Action Engine, of Bellevue, raised $15.6 million. In clean tech, the MoneyTree report highlighted Propel Biofuels — which received $4.7 million — and 3Tier, which raised $2 million.
![]()
Biologically engineered therapies didn't lure much venture funding in Washington. The Ernst & Young/VentureOne report says that biopharmaceuticals raised $900,000 this quarter, down from $59 million in the previous quarter, most of which went to biotech startup VLST.
But the lack of significant deals doesn't necessarily mean there's a lull in the sector, as venture-capital firms often take months to evaluate opportunities, said Chad Waite, managing director at Kirkland-based OVP Venture Partners.
The state's companies raised $210.35 million, down from $301.52 million the previous quarter, according to the VentureOne report. The MoneyTree data is a bit sunnier, reporting $235 million in investments, down from $268.9 million the previous quarter.
But venture-capital activity must be measured in longer terms, Waite said. In Seattle, the funding rhythm remains "pretty good," he said. "For about a year, things have been pretty steady."
Ángel González: 206-515-5644 or agonzalez@seattletimes.com
Copyright © 2007 The Seattle Times Company
Rainier Pacific Financial calls rescue 'unlikely'
UPDATE - 09:37 AM
Clearwire gets $1.5B in financing from Sprint, others
UPDATE - 09:06 AM
Median home prices fell nationwide in 3Q
UPDATE - 09:20 AM
Housing plan reaches 1 in 5 borrowers
Credit-card holders to pay price for bank struggles

Ken Auletta talks about "Googled"
Ken Auletta talks about Google with Brier Dudley at the Seattle Central Library.
nwjobs

Post a comment

Michelle Goodman blogs about work/life balance.
How to tell your office you're gravely ill
Post a comment
nwautos

Choosing a new sedan? Weigh the impact of your choice on your wallet and on the planet.
Post a comment
- 'Missing' SeaTac man found with new name, in new state
- Police: DNA from officer's slaying matches suspect
- Prosecutors consider charges against suspect in police shooting
- Three more fires ignite in Greenwood
- Lt. governor's son shot by co-worker in Kent; gunman then shot self
- McGinn next Seattle mayor; Mallahan concedes as vote gap widens
- Steve Kelley | Hasselbeck gives Seahawks' sagging season a stay of execution
- Plans call for Triangle to become West Seattle gateway
- Trucker dies as big-rig plummets off SF bridge
- DNA, ballistics tie man to cop killing, police say
- Prosecutors prepare charges against suspect in police shooting
261 - House health bill unacceptable to many in Senate
261 - Pelosi tours Seattle's Swedish after health-care vote
200 - Alleged shooter tied to mosque of 9/11 hijackers
141 - McGinn more than doubles his lead over Mallahan
129 - Resolute Fort Hood soldiers ready for return
127 - King County OKs 'don't ask' law on immigration
107 - Josh Smith picks UCLA
80 - 'Missing' SeaTac man found with new name, in new state
75 - Cutaia says replay handled properly on Austin TD
71
- For 80-year-old Maple Valley man, hoops aren't just a dream
- Plans call for Triangle to become West Seattle gateway
- Three more fires ignite in Greenwood
- 'Missing' SeaTac man found with new name, in new state
- Silver Lake restaurant destroyed by fire
- Pakistani-American cafe, bar owner on verge of being Granite Falls mayor
- House Speaker Nancy Pelosi tours Seattle's Swedish after health-care vote
- All You Can Eat | Fruit flies: thrill to the kill
- Taste | Ruth Reichl still reigns as queen of America's culinary scene
- McGinn next Seattle mayor; Mallahan concedes as vote gap widens









